After three separate bailouts totaling over $17b, Congress is beginning to wonder if keeping auto-finance giant GMAC alive was worth it. Forbes reports that the Congressional Oversight Panel reckons at least $6.3b of that money could be gone forever, as GMAC flounders towards barely breaking even. And like the rest of the bailouts, the fundamental problem is that the influx of federal cash has allowed GMAC to pretend like it’s not struggling for survival. The panel report [full document in PDF format here] notes [via Automotive News [sub]]
Treasury’s previous and current support is not underpinned by a mature business plan. Although GMAC and Treasury are working to produce a business plan, Treasury has already been supporting GMAC for over a year despite the plan’s absence. Given industry skepticism about GMAC’s path to profitability and the newness of the non-captive financing company model, it is critical that Treasury be given an opportunity to review concrete plans from GMAC as soon as possible.
The GM subsidized gravy train has ended and I no longer have access to employee priced leases so I will be replacing a Saab 97 and a Saab 93, numbers 11 and 12 in a long line of Saabs over the years.
All kinds of strange news are coming from GM’s Korean foster child Daewoo. Two days ago, Daewoo CEO Mike Arcamone announced: “In 2010, GM Daewoo will be profitable. That is my target.” That didn’t get much traction. Reporters wanted to know how bad last year’s numbers were. Arcamone remained tight-lipped. He admitted red ink for 2009, how much remains anybody’s guess. In 2008, it was $773m worth of red. Last October Daewoo-is-me had to be bailed out by the bailed-out GM to the tune of $413m. Arcamone has some soothing news: “We currently do not seek any other financial support from our creditors.” The operative word is “currently.” There is one way to stop the hemorrhage for good: Pack it in. (Read More…)
Ford’s new Taurus-based Interceptor will be available with the 3.5 liter Duratec, or the twin-turbo Ecoboost engine. Front wheel drive is standard, and AWD will be an option. But then, if you got to use other people’s tax money to buy your work ride, would you really save the few bucks by not buying the 365 hp, AWD version? Of course not. You are the law! Libraries can always have bake sales. [via Jalopnik]
The former GM-Toyota joint-venture known as New United Motor Manufacturing Inc (NUMMI) in Fremont, CA is a big plant. Its nearly 5,000 employees can churn out over 400,000 compact cars and pickups in a year when operating at full capacity, which of course it hasn’t been for some time. With GM leaving the joint venture during bankruptcy, and Toyota currently winding down the remaining operations, those 4,700-ish employees and their 5.3m square foot plant need work. Local media call their outlook “gloomy,” noting that semiconducter workers will be first in line for the few new manufacturing jobs in the area, with a solar panel firm. But, in keeping with the green revival theme, an electric vehicle startup called Aurica says it’s in negotiations to take over NUMMI, where it says it will build unspecified EVs, in a venture that currently has an “undisclosed” finance plan. Are we buying this? Let’s look at some numbers.
Volkswagen’s range of BlueMotion cars are their flagship “Look at us! We’re bluegreen!” vehicles. They employ techniques like a remapped engine, longer gear ratios and better aerodynamics to wring the last bit of mpg out of an ICU. The Blue Oval of Ford has the EcoBoost systems which are engines with a turbocharger or direct injection. That’s said to give power and torque on par with larger engine sizes, resulting in better fuel consumption and lower emissions. Daimler has its Bluetec, a slightly disgusting technology that requires overpriced urea to be added to your Benz – urea, as the name indicates, originally was a by-product of urine. (Now why didn’t the hyperkilometering AutoBild think of THAT?) Anyway, Hyundai wants in on the act. (Read More…)
Volkswagen and its freshly hitched 20 percent bride Suzuki will have a sit-down next week to “flesh out their joint projects by welding together a number of ideas,” reports The Nikkei [sub] from an earnings briefing in Wolfsburg.
The Nikkei guesses that Volkswagen will provide hybrid and electric-vehicle technologies to Suzuki. In turn they are interested in know-how on manufacturing subcompacts at low cost. As far as distribution goes, the two will most likely compare notes on China, where VW is strong, and on India, where Suzuki rules the roost.(Read More…)
Japan’s Automobile Manufacturers Association said “hai, wakatta” (yes, we understand) to their government, and promised to “actively support the creation of an international mutual-recognition framework for passenger cars,” reports The Nikkei [sub].
While Toyota has recall troubles in one of their largest markets, elsewhere in the world, another carmaker has serious recall troubles in one of their biggest markets. We usually don’t comment on each and every recall everywhere, but this one warrants mention: Brazil’s Justice Ministry has fined Fiat’s Brazilian subsidiary 3 million Reais (about $1.7 million) for failing to comply with four recall orders. Fiat had been asked to recall Stilo models to fix a wheel problem that may (note the key word “may”) have caused 8 deaths since 2004, says Business Week. No recall followed. (Read More…)
The paint scheme is a big but obvious clue, but today’s cop car theme makes this irrepressible. Today’s Rampage guessing turned into a rampage of correct right guesses, within minutes of posting it. Steve Campen jumped in first. I’m guessing someone’s going to guess this one even faster.
When Ford announced that it would be building an “all-new” Police Interceptor model, speculation was rampant. At the time, we noted:
GM went to Australia for their police-duty RWD platform, might Ford do the same with a Falcon-based interceptor? Or is this the prelude to Panther 2.0? Or, as common sense seems to dictate, is the Interceptor “all new” simply because there’s just never been an Interceptor based on this Taurus before? If Ford is really engineering a dedicated fleet vehicle for US production with no civilian counterpart, they’re as crazy as GM is.
Against all odds, common sense won out (damn you Alan Mulally!). The Detroit News reports that the new Interceptor will debut tomorrow, and that it will be based on the Taurus’ D3 platform. Which gives us less than 24 hours to speculate about which engines will be turning which wheels, and whether Ford and Chevy’s FWD-RWD cop car flip-flop will favor one automaker or the other. Oh yes, and mourn the eventual passing of the Panther platform, now that there’s no hope of a police duty-inspired update. Actually, some of us might need to take our time with that last one…
Anyone who follows the auto industry with any regularity will know that comparing Toyota and Chrysler by any measure is laughable. For mainstream media types, who flit from frenzy to frenzy, all the negative press about Toyota might have left some believing that it’s the worst-off automaker in America. Luckily CNN Money is on-hand to set the record straight, with a piece titled “Forget Toyota. Chrysler’s got the most problems.” It’s a standard litany of TTACian criticism: declining sales, fleet and incentive dependence, no new product, flatlining consideration, and general suckitude. All of which helps make a solid month of media frenzy over sticky accelerators look kind of silly, especially considering that Chrysler’s stunning underperformance comes courtesy of the American and Canadian taxpayers.
In a conversation with The WSJ [sub]’s Paul Ingrassia, former Car Czar Steve “Chooch” Rattner did some “back-of-the-envelope calculation” to show why he believes the US taxpayers will see their $50b “investment” in GM recouped when The General goes public sometime in the next year.
Here’s how Rattner gets to his latest calculation: Bonds of GM’s bankruptcy estate – known as Motors Liquidation – are currently trading around 30 cents on the dollar, according to Thomson Reuters. Those bondholders were owed $27 billion.
As part of GM’s restructuring, those bondholders were promised a 10% stake in GM when it goes public. In very rough calculations, those bonds are currently valued at about $9 billion (because they currently trade at around 30 cents and were originally worth $27 billion).
Assuming that $9 billion represented 10% of GM if it went public now that would imply GM had a value of around $90 billion. The taxpayer’s stake: 60% of that $90 billion, or $54 billion — Rattner’s magic number.
In typical Carlos Ghosn style, the father of the Nissan EV throws down the gauntlet. gm-volt.com quotes him from a talk with reporters:
“Frankly, I mean so far there is no competition. Let’s be serious. It’s not because someone is coming with a prototype and one car that this is competition. The question is how much capacity are you building. What I am sure is that in 2011, I am going to be the only one on the market”.
In that regard, Ghosn has put production capacity where his mouth is with Nissan planning on 500k in global sales by 2012: “The numbers are big,” Ghosn said. As a frame of reference, GM has indicated production of 8k Volts in 2011, and an ability to ramp up to about 50k annually thereafter. Did GM bet on the wrong horse with its smaller battery but range-extending generator equipped Volt? GM NA Prez suggests that might well turn out to be the case. (Read More…)
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